Chinamasa quizzed over bond notes-insists that’s the best solution for Zimbabwe to recover

“It has no value at all; it is not supported by gold or anything as used to be the case.  So, I agree that it is supported by confidence, which is why it is very important as we go forward to restore whatever we are going to do with confidence. 

“Do not withdraw it because if you do, you do it at the peril of yourself, families and businesses.  That is the truth.  So, it is important as a nation that we give confidence to what government is doing, including the introduction of bond notes.  If you do not give it confidence, businesses collapse as they are collapsing because there are not enough US$ in the market.  There is no medium of exchange in Zimbabwe right now because there are no US$ cash.”

Chinamasa also disputed the thinking that everyone was against the bond notes.

“I dispute the allegation that the whole market is resisting.  In fact, there is nothing being foisted on the public.  The truth of the matter is that the criticism we get from those who are going to benefit from the bonus scheme is that, it is too little,” Chinamasa said. 

“The criticism is that the 5% incentive is too little.  They would wish it was 15%.  Like I said, we are targeting those who export.  If you are not exporting, you have nothing to worry about; you are just a consumer of what these people have done for you without even working.  So, we need to make that clear.”

Q & A

HON. MASHAKADA:  My question is directed to the Hon Minister of Finance and Economic Development, Hon. Chinamasa.  We all know that the liquidity situation in the country is alarming and that the banks are running dry.  In view of the liquidity crisis that the country is facing, what are the prospects of Zimbabwe getting fresh funding from the IMF now that the country has cleared the outstanding arrears?   

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA):  I thank the Hon. Member for this question.

There are two aspects to it; the first one has to do with the liquidity situation.  With respect to that, that is a problem of shortage of foreign currency in our country, which is why we are going to introduce Bond notes to enhance exports so that we can increase the availability of the US dollars in our market.

We are also moving away from an over liberilised foreign exchange market to one which sets priorities on the usage of our foreign currency and that already is taking place.  The issue of the liquidity problem – I consider it temporary and we are in a transition from over liberilised foreign exchange market to one which is managed.

From now on, we are saying any foreign currency that we earn as Zimbabwe is going to be prioritized with respect to its usage.  We will no longer allow foreign currency to buy trinkets which have no use at all for the development of this country.

The second aspect of your question which says when are we entering into a programme with the IMF; I would like to say that we are not yet entering into any kind of programme.  As you know, yes, we have settled to the IMF but the rule is that we must under the Pari-passu rule, settle arrears for all three multilateral institutions which are the IMF, the World Bank and the African Development Bank.  Until we do that, it is too early to talk of any programme to be funded by the IMF or by any of the two multilateral institutions.   I thank you.

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